SCOTTSDALE, AZ -- "This meeting celebrates where we have been and where we're going," said TouchTunes Interactive Networks chief executive Charles Goldstuck during his keynote address for the jukebox company's third annual partners meeting. "TouchTunes is always looking to create new revenue streams for its operators."

Since adding the Beatles to its catalog in April of this year, their 13 studio albums have generated more than 2 million plays across the TouchTunes network, Goldstuck reported.

JW Marriott's Camelback Inn was the site of this year's TouchTunes partners meeting, which was held from Sept. 12 through 14. The annual event brings TouchTunes operators together for a comprehensive update on the company's expanding capabilities and an opportunity to share experiences with its digital downloading jukeboxes. This year, Goldstuck had been called to South Africa because of a family emergency, so he delivered his keynote by satellite relay.

The chief executive summarized the past year's results, reporting that TouchTunes is on track to have an installed base of 60,000 jukeboxes by year's end, up from 44,000 a year ago. Of these, he estimated that 7,000 will be the Virtuo, billed as the world's first "smart" jukebox. The company has sold more than 5,000 of these since the model's introduction in spring 2011.

Virtuo, styled to resemble a scaled-up smartphone, was developed specifically to appeal to the new generation of mobile consumers. It continues to perform well, Goldstuck said, with average weekly revenue twice as high as the overall network average.

Designed for ongoing upgrade through software enhancements, Virtuo now supports PhotoBooth (which allows patrons to make on-location photographs of themselves and post them to social media sites) and Karaoke services.

"Virtuo has been a great success story, and is generating tremendous excitement," Goldstuck told the group. "There have been no major hardware or software issues over the past six months, making Virtuo the most reliable product that TouchTunes has ever brought to market."

To date, 80% of installed Virtuo machines are PhotoBooth enabled, the TouchTunes chief executive reported, and 60% of the images made by patrons with the PhotoBooth feature are being shared through Facebook, directly from the Virtuo screen. "PhotoBooth is engaging and fun, and gets noticed," Goldstuck said, "and it offers a new revenue stream."

Karaoke has been one of the services most requested by the Virtuo operator community, he continued, and the new karaoke feature is being deployed methodically in response to this demand. "Our controlled rollout continues, with 300 locations having installed karaoke," Goldstuck explained. "Usage is also growing, with 30% of locations having more than 30 songs performed each week."

The TouchTunes music library's karaoke catalog now has more than 17,000 licensed tracks in more than 50 genres, and includes 85% of the KJ (Karaoke Jockey) top 500 songs. Well-known artists recently added to the list include Billy Joel, the Rolling Stones, Madonna, Katy Perry, Maroon 5 and Justin Bieber.

Virtuo's personal-electronics style inspiration has been carried through in its adaptability to access by mobile-device applications and integration into social media. "Our social media outreach efforts continue to bear fruit," the TouchTunes chief emphasized. TouchTunes now has over 68,000 "likes" on Facebook, up from 22,000 likes a year ago.

"TouchTunes' social media presence is important as it helps TouchTunes stay relevant, extend its reach to new users and encourage more play when consumers are in-venue," Goldstuck explained.

For that reason, the company introduced a mobile application, myTouchTunes, which has been downloaded 850,000 times since it was first launched. Now in its second version, myTouchTunes guides users to nearby locations with TouchTunes jukeboxes and offers a variety of services, custom features and loyalty rewards. "We now have well over 600,000 mobile plays per week," the company chief executive reported, "and we have over 150,000 unique mobile users per month."

He added that 80% of the TouchTunes network now supports the mobile app and, over the next four months, TouchTunes plans to release updates to the application that will make it even easier and more engaging to use.

In addition to its Virtuo products, which run on TouchTunes' OpenStage platform, and mobile apps, the jukebox company continues to support is legacy equipment. It is beginning field-testing of its next release of Gen3 software, which will refresh. It will roll out in January.

Driving all system enhancements is the TouchTunes digital music library. The company reports over 2.1 million plays of The Beatles since the Fab Four were added to the network on April 1. | SEE STORY

TouchTunes experienced a strong upswing in demand when Ecast went out of business this spring, Goldstuck noted, and has accelerated its manufacturing and delivery systems to minimize backlogs.

"Where others might rest on their laurels and think that they have done enough, we are continuing our efforts to keep pushing the boundaries," Goldstuck concluded. "Our leadership position in the industry requires that we commit to ongoing innovation, quality and customer service, and as such, the outlook for our continued success is very bright."

LEARNING THE WIRES

Following the keynote speech were three breakout sessions: "Making Karaoke a Star," facilitated by TouchTunes' senior vice-president of sales Phil Cohn and product marketing manager Hayley Ostrager; "Increasing Consumer Engagement to Maximize Value," moderated by Vicki Saunders, vice-president of music marketing and promotions, and Tom Simpson, applications manager; and an "Acoustic Primer for a Great Sound Experience," led by TouchTunes' senior vice-president of business operations Eric Saint-Jacques and field training and support director Rick Hirshman, with Bang & Olufsen sound system experts Pal Meister and Tomas Schioenning.

The second day's activities were keynoted by Cohn and senior vice-president of technology and operations Michael Tooker, who explored the role of innovation in securing strategic advantage. This presentation was followed by two breakout sessions.

"Using Compass to Increase Revenues," presented by Saint-Jacques and business development manager Kathy Hickey, spotlighted the ways operators can use the online tool that gives them a comprehensive view of the activity in locations. Information delivered by Compass can pinpoint opportunities for revenue enhancement and, by flagging underperforming sites, point to locations that require some hands-on support and education.

Answering the question "Can Social Media Make a Difference?" were TouchTunes' chief marketing officer Pat Shores, along with Saunders and Ostrager. While social media are everywhere, their potential for boosting participation and sales for operators is not always evident. Shores and Ostrager reviewed the ways in which operators can use TouchTunes social media initiatives online and in-venue to add value to their services, and thus to their patrons, locations and businesses. They also discussed the latest additions to the myTouchTunes mobile application, and suggested some actions operators might take to attract and engage customers in this dynamic space.

The culminating event at the 2012 TouchTunes Partners Meeting was a festive luncheon, enlivened by a drawing for a free trip to Las Vegas to attend the Cirque du Soleil's Beatles Love show at the MGM Mirage. It was won by Jonathan Peyravy, Peyday Enterprises LLC (Broken Arrow, OK).

TouchTunes introduced its first digital-downloading, pay-per-play commercial jukebox in 1998, and today operates an interactive entertainment systems network that plays more than 1.5 million songs per day. The company maintains a digital music library covering more than 2 million licensed tracks from every major record label, plus independent music distributors and a host of independent labels.

TouchTunes Recognizes Partners' Involvement

Climaxing the first day of the TouchTunes 2012 Partners Meeting was an awards presentation at which the company recognized customers who have played important roles in continuing to increase its national footprint and upgrade its installed base.

The TouchTunes Virtuo Vanguard Award is bestowed on operators running 10 or more Virtuo machines which represent at least half of its jukeboxes in the field. The Gold Virtuo Vanguard Award that recognizes operations whose jukebox business is conducted with 50% to 75% Virtuo equipment, was conferred on Superior Amusements (Midland, ON, Canada). The Platinum Virtuo Vanguard Award, presented to operators with 75% to 100% Virtuo models, went to Coin Op Solutions LLC (Marietta, GA) and L&M Music Co. (Williamsport, PA).

Receiving a Trailblazer Award in recognition of outstanding commitment to TouchTunes innovation was Midwest Coin Concepts (Waite Park, MN); the innovation spotlighted by this year's award is the MyTouchTunes mobile app. Bringing home a 2012 Rising Star Award, which honors an operator new to the TouchTunes program who has demonstrated outstanding commitment to the company's products and services was Trajoe Amusements (Brooklyn, NY).
Recognized as Distributor of the Year was Legacy Coin-Operated Distributors (Myrtle Beach, SC), whose award paid tribute to the organization's outstanding growth of jukebox sales, training initiatives, marketing activity and customer support.